LABOUR'S POLICY

New Zealand Herald, Volume LXXIII, Issue 22421, 18 May 1936, Page 11

LABOUR'S POLICY

A BIRD'S EYE VIEW CONTROLLED ECONOMY BUFFERS AGAINST WORLD " BUILDING PROSPERITY " Amid the welter of new bills and statements that has filled the newspapers for weeks past, the ordinary man or woman may quite well find trouble in grasping the Labour Government's legislative and administrative programme as a whole, and understanding how its Parliamentary measures relate to one another ,§|id fit into the scheme.

Labour's objective, in the words of the Prime Minister, Mr. Savage, is to "build prosperity in this country." It pins its faith to a State-managed internal economy, which it hopes to insulate in a large degree from world economic influences by a system of State export marketing, reciprocal trade agreements, and State control of currency, credit, exchange and imports. Considering New Zealand's dependence upon overseas markets for the sale of most of what she produces, commentators in Britain have expressed doubts whether these measures will be able to cope with wide fluctuations in world prices. Monetary Domination

The purpose of the managed internal economy has been described by the Minister of Finance, Mr. Nash, as "the organisation of natural resources so as v,o ensure their maximum utilisation and the distribution of production in such a manner as to ensure the highest standard of living to all who render service."

As a primary measure, the Reserve Bank has been reorganised and converted into what may be described as a State super-bank, an instrument of Government policy under the direct and complete control of the Minister of

Finance. The bank controls credit and currency, and the London exchange credits representing the proceeds of the sale of New Zealand produce. By its power to suspend the convertibility of its own notes into sterling it can stop or restrict the transfer of funds to or from London, and so is in a position to ration exchange, regulate imports and prevent the flight of capital. It is empowered to make advances to the Government on overdraft, by discounting Treasury and produce bills, or by the purchase of long-term securities Stabilised Dairy Prices Reserve Bank overdrafts are to be used to finance the new dairy produce export marketing scheme. After August 1 next the export dairy produce will become the property of the Government as soon as it has been placed on board ship, and the factories will receive forthwith a "guaranteed" price, fixed for the first season on the basis of prices for the past eight to ten years, and thereafter on certain general principles. The produce will be marketed by the Government, and the proceeds will be paid into a special account in the Reserve Bank. If there is a surplus, it will be held for the benefit of the dairy industry. Kindred schemes for other staple exports are contemplated, but will probably not be launched for some time. Details of them are lacking, but they will be different from the dairy produce scheme, inasmuch as certain export products, notably wool and livestock for freezing, are already for the most part sold in New Zealand by the producers. Mr. Nash, who as Minister of Marketing, is to visit London very shortly, places great faith in the Government's ability to make reciprocal agreements, first with the United Kingdom and later with other Empire and foreign countries, for the exchange of goods. This implies the regulation of specific imports, and perhaps of primary production as well. Wage-raising Machinery The measures to increase the spend-ing-pcwer of the public are comprehensive, but they directly affect only wage and salary-earners and dairyfarmers The latter, it is promised, will receive an improved return this year from guaranteed prices. All wages, whether under the control of the Arbitration Court or not, are shortly to be restored to the 1931 level by general order. The Court is directed to within three months, minimum rates of wages for adult male and female workers in all industries within its juris-' diction. The wage for males is to be sufficient to provide for a man, wife and three children, instead of one child as in Australia. It has been estimated that this will require payment for more than 200,000 children who do not exist. Higher minimum wages are provided by Statute for workers in factories and shops. More Workers and More Leisure Amendments to the Industrial Conciliation and Arbitration Act encourage the unionising of nearly all unorganised classes of workers, including clerks. The formation of Dominion-wide "big unions" is facilitated and wherea union exists all workers in the industry miust belong to it or lose their employment. Compulsory arbitration ia restored, and unspecified employers may be automatically joined as parties to an award. The Government has ma.de it clear that it will not stop at restoring the 1931 level of purchasing-power, but will go on increasing it as production increases.

In order to spread employment and provide more leisure, the 40-hour working week has been made the standard for the Public Service and practically all industries, without reduction of wages. It is imposed by legislation upon factories unless exemption is granted by the Arbitration Court, which must state its reason for including a longer week in any award. The maximum in factories and shops is to be 44 hours u week.

Millions for Public Works Farm employment is to be made more attractive by increased . wage rates based on the guaranteed price and liberal annual holidays on full pay. A three years' programme of public works, absorbing £17,500,000, is planned as an immediate source of "productive" employment. The wage basis is to be £4 a week for a labourer. Wages on relief works and sustenance rates will be substantially increased, hut renewed efforts to place the unemployed in industry are promised. Kates of interest on mortgages having already been reduced, the Government intends to lighten the debt of farmers and home-owners by writing down rural mortgages to the present productive value of the: land on the basis of the guaranteed price, and home mortgages on that of current property values. Borrowing is to be avoided in financing all the various schemes, but the exact method to be used has not been disclosed, and how far it may involve inflation is a matter for conjecture.

Another open question ;s whether an attempt will be made to control the •'wages" of capital in industry. The Government has already declared that more of the enhanced profits from machine production will be passed on to the workers.